What prevents an e-shop from being born global? Here we share some thoughts.
Let’s start with having a look at what “born global” means:
“Born global is a type of company that from the beginning of its activities pursues a vision of becoming global and globalizes rapidly without any preceding long-term domestic or internationalization period”. – Dictionary of International trade
What’re the biggest obstacles?
The most obvious obstacle, for an e-shop to be born global, is most probably the physical involvement which an e-commerce business needs to take care of. In contrast to companies such as Spotify (with an 100% intangible product), which does not have a considerable need of a physical presence, e-shops (in most cases) needs to deliver its products physically, in order to fulfill all commitments to its customers. This leads to the fact that there in most cases is a physical link between an e-shop and its clients. And this drags them down from being born global.
Also, a lack of presence in marketing and local market awareness do effect.
But, many e-shops easily offers to sell its products on a global scale. Isn’t that the same as being born global?
That is partly right of course. But it also depends on how you see it. If you define born global as just reaching out to potential buyers, then it is quite easy to become a “global player”.
This can today be done together with a global delivery partner, which there are several of. But, if you rather define to be born global as an ability to compete in all markets, on equal terms as the local players do. Then it becomes a bit more complicated.
There is a simple answer to this: Shipping. More exactly – the cost of shipping and the delivery time. Today’s e-commerce clients are picky when it comes to delivery time. Yes, you can even say that they are a bit “spoiled” these days and they have a good reason to be so. More and more competing e-shops, but also more freight alternatives available, has given the opportunity of 1-2 days in delivery time on most major markets. This more or less demands a physical presence not too long from where its clients live.
An in-house logistics set up on a global scale at an early stage is very rarely possible for an e-shop. The cost and complexity are basically too high.
So, how does an e-shop gets born global?
So, is there a possibility for an e-shop to become “born global”? Yes, we are pretty sure it is – If it can master it’s global supply chain and logistics.
One way of doing so is to outsource the logistics part to a local 3PL partner, for all logistics handling at the actual market. This can be the best and easiest way for global expansion at a rapid pace.
Sounds interesting? Prime Penguin simply brings you a network of selected 3PL companies with an easy integration to your e-shop.